(Telecompaper) Russian operator Rostelecom reported first-quarter revenues of RUB 80.4 billion, up 1 percent from a year earlier. Excluding its mobile activities, which have been spun off in a joint venture with Tele2 Russia, the fixed-line business grew sales 4 percent to RUB 73.2 billion. OIBDA fell to RUB 26.5 billion from RUB 29.4 billion a year ago, and the margin dropped to 33.0 percent from 27.0 in Q1 2013. Net profit amounted to RUB 6.9 billion, an increase of 8 percent compared with the same period last year. Rostelecom reduced capex by 60 percent year-on year to RUB 10.0 billion or 12.4 percent of revenue. It generated free cash flow of RUB 12.7 billion, and net debt totaled 184.0 billion at the end of March. Rostelecom said results were in line with its budget and support its proposal to increase dividends. It continues to offset the drop in fixed-line revenues with expansion in broadband and TV and targets another RUB 5 billion in cost savings this year to shore up margins and offset inflation. The operator finished the quarter with 10.8 million broadband customers, up 8 percent from a year earlier. This includes 4.3 million on fibre, an increase of 28 percent year-on-year. Pay-TV subscribers also rose by 8 percent, to 7.6 million, with the IPTV base up 33 percent to 2.3 million. The number of mobile subscribers increased by 9 percent to 14.8 million at the end of March.